Don’t wait too late to create your will
For entrepreneurs, prioritize a will and testament early on
Twenty-seven million working-age Americans (approximately 14 percent) are entrepreneurs. And 80 percent are leasing space or registering their company, according to Inc. But even with the continuing success (or bravery) of creating a startup, six out of 10 American adults do not have a will or living trust.
It makes sense to not bother with a will if you don’t own personal or business real estate, or if you do not own a business or collect continuous funds from your workplace. But for entrepreneurs, this should be a priority.
Who is the average entrepreneur?
- 95.1 percent earned a bachelor’s degree
- 47 percent earned an advanced degree
- Male entrepreneurs outrank women with a ratio of 60 to 40 percent
- Most entrepreneurs are often white (with only 7 percent African-American; 10.6 percent Hispanic; 4.3 percent Asian)
- Highest age range of an entrepreneur is between 31 to 35 (with 3 percent between 21 to 25; 17 percent between 26 to 30; 27 percent between 31 to 35; 21 percent between 36 to 40; and 24 percent between 41 to 50)
However, the average age of a successful entrepreneur is 45, reports Harvard Business Review.
Who is the average person with a will?
Almost all estate planners, on average, have definitely earned their way to senior discounts. AARP reports that 81 percent of estate planners are 72 or older, with 58 percent of Baby Boomers between 53 to 71. That leaves the families of 78 percent of Millennials (ages 18 to 36) and 64 percent of Generation Xers (ages 37 to 52) scrambling around to figure out what to do with their family member’s earnings. So what happens to the families of entrepreneurs who fall into the latter category?
Does the company stay in business? Who receives profits while this company is still open? How does one access the financial records of the business? What happens when an ex-spouse helped start the business but the entrepreneur married again? How do business partners factor into profits versus families?
While the obvious assumption may be that the immediate spouse or children would receive these earnings, without anything legally on paper to confirm this, all that hard-earned work could end up in probate court. (Probate court can eat up about 3 to 7 percent of profits. For someone who has $90K to share, that’s about $2,700 to $6,300. The more income the entrepeneur earned, the higher those legal fees could be.) And for single women (or men) entrepreneurs who never had children, that leaves siblings and parents (assuming they’re still alive) scrambling to ration out these earnings.
How does one start a last will and testament?
Obviously lawyers would be able to help plan this process. But there are free will documents all over the Internet. Companies like Rocket Lawyer provide free versions of a last will and testament during a seven-day trial period. There is even a free affidavit option. Rocket Lawyer walks you through the process of breaking down any digital earnings you make (ex. Medium earnings) and instructions for how to access digital usernames and passwords. (Note: If you’re uncomfortable sharing your password on these documents, there are note options to describe where to find the passwords so you don’t have to spell them out. Additionally, this helps should you regularly change your passwords.)
If one of the beneficiaries of the last will and testament passes away within 30 days of the document being released, there are also options to split the funds equally with the remaining beneficiaries. Or, if you have multiple beneficiaries (ex. five), you can specify who would get one of the five people’s share should (s)he not be able to.
Notaries can be a wee bit of a pain though, depending on your state. In Illinois, account holders at Chase Bank used to be able to get free notary stamps. After visiting three different Chase banks in Chicago, Lincolnwood and Skokie this past weekend, notaries confirmed that this is no longer allowed. This may not be the case for non-Illinioisans though. Chicago currency exchanges and UPS locations also refuse to notarize living and/or last will and testament documents. All three companies will notarize other forms of documents per usual though, and Chase will do so for free for account holders.
Still using Illinois as an example, NOLO confirms that a notary is not necessary in order for a will to be valid. However, two witnesses being present when the person creating the will signs it is. And that person should be physically available to see the two witnesses sign his or her will. Other states may require stricter terms to prove that this will was created when the person is of “sound mind.” (Beware of multi-purpose companies that overcharge for notarizing documents. Here are the “State Maximum Fees For Common Notarial Acts.”)
With these tips above, hopefully you can prepare a simple will, get witness signatures and find a notary in as little as one weekend. So what’s stopping you from getting it done?